Correlation Between Dampskibsselskabet and Ambu AS
Can any of the company-specific risk be diversified away by investing in both Dampskibsselskabet and Ambu AS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dampskibsselskabet and Ambu AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dampskibsselskabet Norden AS and Ambu AS, you can compare the effects of market volatilities on Dampskibsselskabet and Ambu AS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dampskibsselskabet with a short position of Ambu AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dampskibsselskabet and Ambu AS.
Diversification Opportunities for Dampskibsselskabet and Ambu AS
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dampskibsselskabet and Ambu is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dampskibsselskabet Norden AS and Ambu AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambu AS and Dampskibsselskabet is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dampskibsselskabet Norden AS are associated (or correlated) with Ambu AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambu AS has no effect on the direction of Dampskibsselskabet i.e., Dampskibsselskabet and Ambu AS go up and down completely randomly.
Pair Corralation between Dampskibsselskabet and Ambu AS
Assuming the 90 days trading horizon Dampskibsselskabet Norden AS is expected to under-perform the Ambu AS. But the stock apears to be less risky and, when comparing its historical volatility, Dampskibsselskabet Norden AS is 1.28 times less risky than Ambu AS. The stock trades about -0.29 of its potential returns per unit of risk. The Ambu AS is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 12,995 in Ambu AS on August 28, 2024 and sell it today you would lose (1,895) from holding Ambu AS or give up 14.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dampskibsselskabet Norden AS vs. Ambu AS
Performance |
| Timeline |
| Dampskibsselskabet |
| Ambu AS |
Dampskibsselskabet and Ambu AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dampskibsselskabet and Ambu AS
The main advantage of trading using opposite Dampskibsselskabet and Ambu AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dampskibsselskabet position performs unexpectedly, Ambu AS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ambu AS will offset losses from the drop in Ambu AS's long position.| Dampskibsselskabet vs. North Media AS | Dampskibsselskabet vs. HH International AS | Dampskibsselskabet vs. Per Aarsleff Holding | Dampskibsselskabet vs. First Farms AS |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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